It’s been a rough year for energy funds. The wild ride taken by natural gas this summer burned many, turning once high-flying funds like Amaranth Advisors, MotherRock and Ritchie Capital’s energy offering into failures, some more spectacular than others.
In spite of the environment, Oakbrook, Ill.-based Highview Capital thinks it can do better, rolling out its new $47 million Highview Avenue Energy Fund on Nov. 1.
“The energy funds that have had problems have been purely commodity-trading funds,” lead partner Jeff Wallace said. “We’re trying to be levered across different products” – investing in energy-related equities and credit, as well as commodities – “hopefully taking a commodity view in different ways across different products.”
The fund will invest in “the whole spectrum” of the energy sector, and has attracted primarily institutional interest. Wallace chalks that up to its multi-strategy mandate, which he expects will be less risky than the heavily-levered commodity energy funds.
Morgan Stanley and Calyon are serving as prime brokers.
“We just want stuff to be volatile, and right now, things are pretty volatile,” he says hopefully. “So we should do well.”